Australian economic growth predicted to halt

Australian households already bracing themselves for the impact of rising electricity prices may soon find themselves placed under more financial pressure.

The latest Westpac-Melbourne Institute Leading Index, released June 20, suggests that Australia's recent economic growth could soon come to a halt.

The index, which aims to forecast the pace of economic growth three to nine months in the future, shows that the annual growth rate was only 0.2 per cent in April 2012.

"The Leading Index is pointing to a sharp slowdown over the second half of this year. Although the growth rate in the Index has improved from the very weak -1.5 per cent read in February, at +0.2 per cent it remains significantly below its trend rate of 2.6 per cent," said Westpac senior economist Matthew Hassan.

"Readings over the last three months have been the weakest since 2009," he added.

Strong economic growth has many trickle down benefits for citizens, including decreased unemployment, higher living standards and increased consumer confidence.

If this latest report is correct, then it may indicate that Australian households are in for a tough few months.

Westpac predicted that the Reserve Bank would move to lower the official cash rate even further in the coming months, to a cycle low of 2.75 per cent.